E-mail Takes a Byte Out of Postal

NOT ALL THAT long ago, many list pros questioned whether e-mail files were a viable-let alone successful-enterprise. Now, as revenues rocket, that question has been answered with a resounding yes.

“It’s an exploding market,” says Deb Goldstein, president of IDG Communications, Framingham, MA, who has watched her own e-mail list rental revenue jump 300% over the last year.

The reasons? There are a bunch.

Higher and faster response rates and no “huge front-end production,” Goldstein says for starters.

For example, using 21st Century Marketing as a broker, CMP Media recently rented 20,000 names from Worldata’s ComFind list in search of subscribers to InformationWeek.

After transmission, the responses piled up “within minutes,” capturing an overall response of 4% to 5%, says Claire Carpenter, director of list brokerage for 21st Century. By the next day, CMP asked Carpenter to “find more names.”

Marketers are also using e-mail to test new creative in postal as well as e-mail campaigns. Testing relatively small samples-3,000 to 5,000 names-can produce “very statistically valid results,” and offers the opportunity to test different pricing, copy and premiums with a quick response, says Regina Brady, Acxiom/Direct Media’s business unit leader, interactive services. “By the next day you know what works best.”

And, marketers are launching e-mail campaigns to coincide with (and improve response rates to) snail mail offers. Others, like one bank, used physical names to run a credit screening and then e-mail addresses to send a pre-approved credit card offer to those who met the financial criteria, says Roy Schwedelson, president, Worldata, Boca Raton, FL.

Pros estimate there were as few as 30 “legitimate” opt-in e-mail lists six months ago and as many as 100 to 200 today with that number growing at top speed. Schwedelson predicts e-mail lists will comprise 40% to 50% of the list management market within one year.

Adding to those numbers are consumer list owners capturing e-mail addresses on house files at a frenzied pace. But, cautions Goldstein, “because of that rapid pace, mailers and brokers really have to pay closer attention to how the list is built. Is it permission based and are there continual opt-out or unsubscribe options in the context of the e-mail as well as the identity of the source?”

And yes, with all those lists coming on the market, advertising dollars are being shifted away from postal direct mail to e-mail. In an informal survey of 30 mailers, Goldstein says 50% took money from their postal budget and put it into e-mail marketing. “There’s a lot of money being taken away from traditional postal direct mail.”

The majority of e-mail marketing continues to be concentrated in B-to-B, but experts say an influx of consumer offers are on the way.

“We’re going to see more consumer-oriented marketers use the Internet to reach people interested in going online to shop and buy as opposed to technical people who are simply interested in surfing around for free information and free software,” says Rosalind Resnick, president of New York-based NetCreations, who operates Postmaster Direct, an opt-in e-mail marketing service.

Newly launched online discount apparel retailer Deal-a-Day (www. dealaday.com) rented 136,091 names from NetCreations’ 1.3-million-name database and generated $5,000 a week in sales. The offer introduced the retailer, described the products, offered a discount and gift certificate drawing and featured a link to the apparel marketer’s Web site.

For Resnick, watching her own list rental income triple over the past year to a predicted $3 million plus this year is a true indicator of a booming market.

Other consumer lists include Worldata’s 200,000-name eShopper file, Acxiom/Direct Media’s Catalog Link file of 250,000 and Edith Roman Associates’ newly launched 40,000-name CatalogFinder list. That file is expected to grow to more than 1 million names by the end of the year-fueled by an e-commerce option slated to debut this month, says Steve Roberts, president of Edith Roman, Pearl River, NY.

Brokers receive the traditional 20% commission for handling e-mail lists and list prices range widely from about $150 to $450 per 1,000 names including transmission. Some charge per deliverable name while others charge per message sent. Some experts expect prices to drop as e-mail marketing becomes more popular. “As more and more lists come on the market we’re going to see a real downward pressure in pricing,” Direct Media’s Brady says.

And even more lists are sure to reach the market. The number of online shoppers-who spent an average $100 per month-hit 13.1 million as of the first quarter ended Feb. 28, according to Austin, TX-based IntelliQuest. Forrester Research agrees, reporting that B-to-B e-commerce will grow by forty times, from $8 billion to $327 billion by the year 2002 and that the number of Web users doubled in the past two years to 66 million.

In general, response estimates range from 3% to 5% to as high as 40% (depending on the offer) but all agree that the speed with which the response is received, combined with a 5% to 20% click-through rate, can’t be beat.

But, experts caution, there are other points to consider. Brady says to watch out for churn-as many as 40% of e-mail addresses change annually, clearly affecting response. “There is no NCOA equivalent in cyberspace,” Schwedelson adds.

Other drawbacks? Many lists have minimal selects and privacy and spamming issues have made list owners reluctant to ship names and do mailings themselves. “This is very reminiscent of the early days,” Schwedelson says. “There is no merge/purge.”

And the type of computer browser consumers use can affect response, adds Worldata’s corporate vice president Jay Schwedelson. He says browser-based software, such as Netscape or Internet Explorer, with capabilities to add graphics, video and audio, make the offer more attractive thus generating a higher response as opposed to text-based B-to-B offers that typically run on in-house mail systems.

Brady says only about 30% of online users have the capacity to receive jazzed-up offers. “We do know that the response is higher when you get all the bells and whistles, but the market is not there yet.”

She adds that the Web site is the place for color graphics, animation and sound. “The e-mail should be the trigger to get consumers to the Web site.”

Another note of caution: Those spammers may have been run off the road but they’re still revving their engines, warns Eric Zilling, vice president of interactive media for American List Counsel, Princeton, NJ. “Mailers have to be very careful which lists they’re mailing. Some companies label their files opt-in when they’re not.”

ALC manages three opt-in e-mail files, DeliveryE, The Globe and FastWeb.

IDG’s Goldstein thinks that with the anticipated 2.9% postal increase this January, list owners can expect to see an increased interest in e-mail marketing.

“I have no doubt that e-mail will become the dominant form of advertising by the year 2000,” NetCreations Resnick adds.

Kleid on the Move The Kleid Co. Inc. has moved its offices to 362 Fifth Ave., Suite 1202/4, New York, NY 10001. The new phone number is 212-244-3341. The company relinquished its former offices at 530 Fifth Ave. following its Chapter 11 bankruptcy filing March 11.

Millard Group Names Director, CIO Millard Group Inc., Peterborough, NH, has named Frank Quaranta to the newly created position of director of new product and system development and Larry Key to CIO and executive director of MIS.

Novus Wins Audubon Society and Parenting Novus Marketing, Tarrytown, NY, has been named to manage the 340,000-name National Audubon Society file and the Parenting Group files of over 2 million names. For more information, call Novus Marketing at 914-347-8400.

Mal Dunn to Oversee Nat’l. Textbook Co. Files Mal Dunn Associates Inc., Croton Falls, NY, has been named to manage the National Textbook Co./Contemporary Publishing Group’s files of more than 108,000 names. The files include English as a Second Language, English/Journalism/Theater/Language/Literature, Jamestown Publishers, Contemporary Adult Education and World Language Educators, and Business, General Interest, The Quilt Digest Press and Career Horizons Book Buyers. For more information, call Mal Dunn Associates at 914-277-5558.